Six Key Tax Changes You Should Know Before you File your Tax Return – Los Angeles Income Tax Planning and Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on May 3, 2013

According to Forbes, before filing his or her federal tax return, a taxpayer should know how six recent tax code changes could significantly affect an individual’s tax bill in 2012.

1. Payroll Tax Credit – The 2012 self-employment tax rate is reduced from 12.4% to 10.4%.
2. W-2 Forms – The value of an employee’s health care benefits will now be reported on his or her W-2.
3. Roth Conversions – Taxpayers who had a 2010 Roth conversion may owe tax in 2012 if the entire conversion was not reported in 2010.
4. Tax Relief for Homeowners – Homeowners who had a foreclosure or mortgage restructuring on a principal residence can exclude income of up to $2 million ($1 million for married taxpayers filing separately) on the mortgage forgiveness.
5. The Standard Deduction and Personal Exemption amounts have increased across the board.
6. Alternative Minimum Tax - The AMT exemption is increased to $50,600 for single taxpayers and $78,750 for married taxpayers filing jointly.